On August 2, 2022, the Committee on Foreign Investment in the United States (“CFIUS” or “Committee”) released its statutorily required Annual Report to Congress for Calendar Year 2021.  CFIUS is the inter-agency body charged with conducting national security reviews for certain foreign investments in the United States.  While the CFIUS process is generally confidential, the annual report provides aggregate data on certain CFIUS activities and offers industry a window into current Committee trends.

Continue Reading Key Takeaways from the 2021 CFIUS Annual Report

Between April 18 and May 2, 2022, the US government continued to ratchet up economic sanctions, export controls, and other restrictive trade measures targeting Russia.  Most significantly, on April 21, President Biden issued a Proclamation prohibiting “Russian-affiliated vessels” from entering US ports.  Otherwise, the US government has focused on utilizing its existing authorities to impose further costs on Russia.

Over the last two weeks of April, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated over 40 individuals and entities including Transkapitalbank (TKB), re-issued an expanded set of Ukraine- / Russia- Sanctions Regulations (URSR), and issued several new or revised general licenses, including one relating to the provision of assistance by nongovernmental organizations, and 8 Frequently Asked Questions (FAQs).

Separately, the Commerce Department’s Bureau of Industry and Security (BIS) continues to be focused on restricting the Russian aviation sector, issuing a temporary denial order (TDO) on the Russian cargo aircraft carrier, Aviastar, for operating aircraft on flights into and out of Russia without the BIS authorization required under the Export Administration Regulations (EAR), and providing weekly updates to its list of commercial and private aircraft operated in potential violation of the EAR.

Continue Reading April 18 – May 2, 2022 Russian Sanctions Update

Between April 5 and April 17, 2022, the US government took several steps to ratchet up economic sanctions, export controls, and other restrictive trade measures targeting Russia and Belarus.

President Biden issued a new Executive Order prohibiting US persons from engaging in new investment in Russia, and also establishing a framework through which US persons could in the future be prohibited from providing certain services to any person in Russia.

The US Treasury Department’s Office of Foreign Assets Control (OFAC) designated a darknet market and cryptocurrency exchange, several Russian banks and their subsidiaries, and a number of companies allegedly assisting the Russian military by adding them to the Specially Designated Nationals and Blocked Persons (SDN) List pursuant to Executive Orders (EOs) 14024 and 13694. OFAC also published seven new and amended general licenses, including authorizations related to the recent designations of Public Joint Stock Company Sberbank of Russia (Sberbank), Joint Stock Company Alfa-Bank (Alfa-Bank), and Public Joint Stock Company Alrosa (Alrosa).

Separately, the US Commerce Department’s Bureau of Industry and Security (BIS) announced new, stringent export controls so that all items subject to the US Export Administration Regulations, except items designated “EAR99,” require a license for export, reexport, or transfer (in country) to or in the Russian Federation and Belarus.

Continue Reading US Sanctions on Russia Continue to Grow

Between March 24 and April 1, 2022, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated over 400 Russian elites, Duma members, and defense companies as Specially Designated Nationals (SDNs) pursuant to Executive Order (EO). 14024. OFAC also published four new, limited General Licenses regarding certain humanitarian, import-related, diplomatic, and journalistic activities, added one new FAQ, and published a determination for EO 14024. Separately, the White House has indicated that the United States is seriously considering imposing secondary sanctions against companies engaged in evasive activities with Russia or in business that otherwise undermines sanctions.

Additionally, on April 1, the Commerce Department’s Bureau of Industry and Security (BIS) added 120 entities in Russia and Belarus to the Entity List.

For a summary of prior US sanctions and export controls related to Russia adopted since February 21, 2022, please see our Steptoe blog posts from March 21, March 8, and February 27.

Continue Reading A Summary of The Latest US Sanctions on Russia

As of March 20, 2022, a new Executive Order (EO) prohibited certain imports, exports, the transfer of US dollar banknotes to Russia, and new investments involving certain sectors of the Russian economy.  The US Office of Foreign Assets Control (OFAC) also issued new General Licenses and Frequently Asked Question (FAQ) guidance. Additionally, the US Department of Commerce’s Bureau of Industry & Security (BIS) announced new regulations to control the export, reexport, and transfer (in country) of certain luxury goods to or within Russia and Belarus. BIS also identified numerous aircraft subject to US export controls jurisdiction that had flown to Russia without a license, and issued a reminder regarding the restrictions under General Prohibition 10 under the Export Administration Regulations (EAR) of servicing such aircraft.

Key points of these US sanctions developments and export controls are summarized below.

For a summary of US sanctions and export controls adopted between February 21 and March 8, 2022, see this Steptoe blog post.

Continue Reading Update: New US Sanctions on Russia Target Certain Imports, Exports, Dollar Banknotes, and Investments

Since February 21, 2022, the United States has joined a coalition of countries imposing sanctions in response to Russia’s invasion of Ukraine. New US sanctions and export controls are wide ranging and complex, significantly impacting trade and related financial transactions between the US and Russia, as well as Belarus.  They also affect transactions and exports from outside the United States in many areas of commerce. The following is a high-level overview of recent US legal developments as of March 8, 2022.

For more information on how these measures could impact your organization, contact a member of Steptoe’s Economic Sanctions and Export Controls teams.

Additional resources can be found on Steptoe’s “Sanctions against Russia: Implications for Business and International Trade” page.

Continue Reading A Summary of New Ukraine-related US Sanctions and Export Controls on Russia and Belarus

On November 12, 2021, the US Treasury Department’s Office of Foreign Assets Control (OFAC) designated the Eritrean Defense Forces, the Eritrean People’s Front for Democracy and Justice (PFDJ), two government-linked commercial entities, the head of the Eritrean National Security Office, and a prominent political advisor as Specially Designated Nationals (SDNs) pursuant to Executive Order (EO) 14046 of September 17, 2021, in response to the ongoing military conflict and humanitarian crisis in northern Ethiopia. These are the first designations made under the EO and OFAC’s recently adopted Ethiopia-related sanctions program.

According to a Treasury Department news release, the designations target Eritrean actors that have contributed to the situation in northern Ethiopia and “undermined the stability and integrity of the Ethiopian state.”

Continue Reading US Government Targets Eritrea with Sanctions over Ethiopia Crisis

On January 15, 2021, the Financial Crimes Enforcement Network (“FinCEN”) announced that Capital One, National Association (“CONA”) had been fined $390,000,000 for “willful” and “negligent” violations of the Bank Secrecy Act (“BSA”) and its anti-money laundering implementing regulations. CONA is a wholly owned subsidiary of Capital One Financial Corporation (“COFC”).  As part of the agreement, CONA will pay $290,000,000 to the U.S. Department of Treasury (it previously paid $100,000,000 to The Office of the Comptroller of the Currency (“OCC”) in 2018 for similar violations).

The fine, which was one of the larger fines in FinCEN’s history, was imposed even though CONA had taken substantial remedial measures including enhancing its anti-money laundering (“AML”) budget, voluntarily commencing an extensive lookback into years of potentially suspicious transactions, and voluntarily exiting the cash checking business, which was the source of its violations.

From 2008 to 2014, CONA owned and operated the Cash Checking Group (“CCG”) which was a check cashing service for small businesses in the New York- and New Jersey-area.  According to FinCEN, during this time, CONA and CCG’s BSA violations were “significant” and “willful.”

Continue Reading FinCEN Announces $390,000,000 Civil Penalty Against Capital One for Bank Secrecy Act Violations

On December 23, 2020, the US Department of Commerce, Bureau of Industrial Security (BIS) published a rule (https://www.federalregister.gov/documents/2020/12/28/2020-26552/amendment-to-country-groups-for-ukraine-mexico-and-cyprus-under-the-export-administration) which amended its EAR Country Group designations for Ukraine, Mexico, and Cyprus in order to bring them more in line with current national security and foreign policy priorities. As we noted in a February 26, 2020 post, this is part of a “larger effort to re-structure and re-align the Country Groups.” (https://www.steptoe.com/en/news-publications/commerce-expands-us-export-controls-on-russia-and-yemen.html). The rule moves Ukraine from Country Group D (countries of national security concern to the United States) to Country Group B (countries eligible for favorable treatment for certain exports of national security-controlled items) while adding both Mexico and Cyprus to Country Group A:6. The rule will have the effect of making more license exceptions available for each country.

Continue Reading BIS Amends Country Group Designations for Ukraine, Mexico, and Cyprus Under the EAR

In this advisory, members of our Sanctions and Export Control team provide a preliminary assessment of the expected policy approach of President-elect Biden’s administration to major US sanctions programs, including China and Hong Kong, Russia, Iran, Cuba, Venezuela, Syria, North Korea, and Sudan sanctions programs.

While specific steps to be taken will be revealed in